

As interest rates reach their highest point in 14 years, you maybe wondering if it’s the right time to remortgage.
The Bank of England’s Deputy Governor says the rate rise at the beginning of August is likely be followed by further increases.
With the cost of living rising and spikes in energy bills, it’s wise to do what you can to keep your costs as low as possible. Remortgaging now might be an option, but it may not be for everyone.
We’ve looked at remortgaging previously, and that blog will tell you all you need to know. But as that was written for general advice at a time of lower rates, we thought we’d update readers on the current situation.
Remortgaging now: our advice
In our earlier blog, we explain when you it’s best to remortgage. For example, if your current deal is about to end, then it’s a good time. But if the early repayment charge is high, then it’s probably not worth remortgaging yet.
But what about during times of rising interest rates? Largely, the advice remains the same. We’d advise that you don’t look at the headline rate, but at your circumstances.
People on fixed-rate deals should consider how long the deal is in place. If there are more than six months before the deal ends, then an early repayment charge probably means it’s best to wait.
Speaking to a mortgage broker is advisable before making any decision. But to explain the current situation further, here’s what you need to know…
Fixed-rate deals
If your mortgage rates are fixed and there are more than a six months to run, then you don’t need to look right now. Your payments won’t change for the duration of your fixed-rate deal.
But if your deal is coming to an end, it’s worth asking your mortgage broker about remortgaging. When your fixed-rate deal comes to an end, you’ll switch to your lender’s standard variable rate. With interest rates increasing, this will be more expensive.
Standard variable rates and trackers
If your current mortgage is a standard variable rate or a tracker deal, your payments are likely to continue to rise this year.
So, now could be a good time to secure a fixed-rate deal at a lower interest rate. Fixed-rate deals mean you know what your monthly payments will be, which helps when you’re budgeting. That’s useful during times of economic upheaval!
The mortgage ‘time bomb’
Some experts, such as Martin Lewis, are warning of a mortgage ‘time bomb’. The advice at The Mortgage Dog is simple: Don’t panic!
He’s right that many mortgages that were taken out during the early part of the Covid pandemic at a low rate are due to expire in the next six months. Anyone who fixed their rate back then will undoubtedly see a rise in interest rates as most lower rate deals have been withdrawn.
But the increase in rates shouldn’t make a remortgage unaffordable! If your mortgage adviser carried out affordability checks when you first applied, then they are likely to have factored in interest rate rises.
We can’t predict the future, but mortgage brokers can help you access deals the lenders don’t offer to the public or via comparison websites. Many of these deals are at lower rates than you can find.
You can contact a broker from the team at The Mortgage Dog today. Just use our contact page to choose the best way for you to contact us.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage